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EU May Get Anti-Money Laundering Authority

Publication: ZRVP

The new EU Anti-Money Laundering Authority (AMLA) will be the central authority coordinating national supervisors, so the private sector correctly and consistently applies EU AML rules. It will also enhance cooperation among Financial Intelligence Units (FIUs), so as to improve their analytical capacity around illicit flows and make financial intelligence a key source for law enforcement agencies.

Considering that economic and financial crimes affect many citizens and companies in the EU, the European Commission focuses on developing a more complex legal framework which would improve the detection of suspicious transactions and activities. As there should be no tolerance for illicit money across EU, adjacent rules for anti-money laundering and countering of the financing of terrorism (AML/CFT) have been recently proposed, which would safeguard Europeans from terrorism and organized crime.

The newly envisaged legislative package is based on several already implemented EU instruments and aims at further implementing the commitments set up by the Action Plan for a comprehensive Union policy on preventing money laundering and terrorism financing.

A key innovation brought forward by these legislative proposals regards a new EU Anti Money Laundering Authority (AMLA) which should be based on a single integrated supervision system composed by common methods and high supervisory standards. AMLA should not only directly supervise some of the riskiest financial institutions across EU but should also closely cooperate with national supervisors for financial and non-financial entities.

Moreover, AMLA is intended to support cooperation and coordination between national Financial Intelligence Units (FIU) across Europe, thus enabling a connection between the private sector and the structures enforcing criminal legislation.

Another important aspect on which the new legislative package focuses is the single rulebook for AML/CFT. This set of rules should harmonize AML/CFT supervisory methods across Europe and should set more detailed rules for different areas of action. Apart from these goals, the Commission endeavors to provide faster access for FIUs to information on private bank accounts and safe deposit boxes, ensuring robust safeguards through specific pieces of legislation.

However, detection of suspicious financial transactions and activities are intended to be improved also in the crypto sector by ensuring full application of the EU AML/CFT rules upon this category of transactions. In this respect, innovative rules for the entire crypto sector applicable to all crypto-assets service providers impose the obligation to conduct due diligence on their crypto customers. For better detecting potential illicit financial flows, the amendments allow full traceability of transfers and prohibit anonymous crypto asset wallets.

The European Commission has also proposed a EU-wide limit of euro 10,000 on large cash payments to deliver common solutions to shared security challenges since cash transactions are hard to be traced.

These attempts to create innovative financial security measures consider a much broader perspective, by understanding the need to overcome distinctions between physical and digital areas. While financial security threats do not respect geographical boarders, a revival of the legislative context that aims at bringing together a full range of security needs should better safeguard all EU citizens.

The European Parliament and the Council of Europe are now expected to discuss the legislative proposal, and the European Commission hopes it will be a “speedy legislative process.”

AMLA is expected to be active in 2024, with direct supervision beginning somewhat later, once the Directive has been transposed and the new legal framework is in place, according to the Commission.

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